Business Loan

Business Property Loan: Overview of the Traditional Commercial Real Estate Loans & Alternatives

Commercial real estate is an essential part of many businesses. You may want to invest in an income-producing property for profit. You may need to expand your company to other locations. In either case, you’ll need to look into getting a business property loan. Some commercial properties include retail, office buildings, bed and breakfasts, farmland, storage facilities, and so forth.

If you’re interested in commercial real estate, keep in mind that traditional banks and independent lenders are involved in giving loans. That’s like residential real estate lending purposes. Some of the criteria are different, however. For instance, lenders will look into whether you are applying as an individual or an entity (corporation, limited partnership, trusts, funs, etc.). The loan repayment schedule, what you will use the property for, and your ability to pay off the loan will affect the approval decision.

Suppose the applicant is an “entity.” In that case, your company or partnership must have an excellent financial track record and a high credit rating. If not, then the owners or principals of the entity must guarantee the loan.

What if you or your business partner do not have an excellent personal credit score and history? If there is no guarantee, companies may refer to the debt as a “non-recourse” business property loan. That means the lender has no recourse against anything or anyone other than the actual property itself. In short, the property is the collateral, and the borrower is not personally liable for it.

Business Property Loan With a Bad Credit History

There are other solutions if your credit history isn’t great (personal and business), such as crowdfunding. You could rent the property if you need to use it for actual business operation or storage purposes. There is no need to try and get a business property loan for renting. It will be even better if the owner will consider selling it to you over a while after you’ve saved enough money and established a better business credit report.

If it’s real estate you’re interested in, you don’t necessarily have to purchase it directly – at least not right away. You can put money into real estate through ETFs, REITS (real estate investment trusts), online lending platforms, and so forth.

Where should you begin your search? Where can you find more information about how to get a business property loan or other types of financing for your commercial property needs? Trust Capital Funding is an excellent place to start. It’s a highly rated organization with a lot of versatile options. Get a free quote by filling out the online form.

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